ECON1000 Final - Exam Name_

Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If Harold can increase the production of good X without decreasing the production of any other good, then Harold 1) ___C___ A) is producing on his production possibilities frontier. B) must have a linear production possibilities frontier. C) is producing inside his production possibilities frontier. D) is producing outside his production possibilities frontier. E) must prefer good X to any other good. 2) A medical clinic has 10 workers. Each worker can produce a maximum of either 2 units of medical services or 5 units of secretarial services a day. One day, the firm decides it would like to produce 10 units of medical services and 30 units of secretarial services. This output level is 2) __A____ A) unattainable. B) is attainable if the firm reduces the number of its workers. C) costless. D) inefficient. E) efficient. Use the figure below to answer the following 2 questions. Figure 2.2

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3) Refer to the production possibilities frontier in Figure 2.2. If 70 units of Y are currently being produced, the opportunity cost of increasing production of Y to 80 units is 3) ___A___ A) 3 units of X . B) 80 units of Y . C) 10 units of Y . D) 1 unit of X . E) 2 units of X . 4) In figure 2.2, as we increase the production of X , we find we must give up larger and larger amounts of Y per unit of X . Select the best statement. 4) ___C___ A) Good Y will be more highly regarded by consumers than good X . B) We must be inside the production possibilities frontier. C) This illustrates increasing opportunity cost. D) As a result, we should not specialize in the production of X . E) The production possibilities frontier for X and Y will be a straight line. Use the table below to answer the following 2 questions. Table 2.1 The following table gives points on the production possibilities frontier for goods X and Y . 5) Refer to Table 2.1. The opportunity cost of increasing the production of Y from 16 to 36 units is 5) __C____ A) 12 units of X . B) 16 units of X . C) 8 units of X . D) 20 units of Y . E) 4 units of X . 6) The diagram of the production possibilities frontier corresponding to the data in Table 2.1 would be 6) ___B___ A) positively sloped for X and negatively sloped for Y . B) negatively sloped and bowed out (concave). C) negatively sloped and bowed in (convex). D) negatively sloped and linear.

E) horizontal line. 7) A technological improvement is represented by

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